This has something to do with strategy, as investors reshape their portfolios for the new year. But it’s more about recognizing losses to count against this year’s income while nursing gains into the new year for sale so income tax on them is delayed.

As a result of tax-selling distortions, the first couple of weeks in January march to their own drummer. Losers beaten down by tax selling rebound (more about this and the “January effect” in a few days); last year’s winners swoon for a short time.

Early January often presents an opportunity to buy interesting stocks a bit cheaper than otherwise.

–dividend stocks

If I’m correct that 2016 will be another so-so year for stocks–let’s say up 5% or so–then stocks with an above-average dividend yield should remain attractive. Since they’re typically mature firms with more reliable income streams, they also provide some downside protection.

The current dividend yield on the S&P 500 is 2.04%. I think anything 50 basis points or more above that is worth a second look. This is one reason I’m holding on to Intel (-2.3% ytd in 2015) and Microsoft (+21.7%).

–sector rotation?

The year to date returns on the S&P sectors are something like this:

Consumer discretionary +10.5%

Healthcare +7.5%

IT +7%

…

Utilities -4%

Materials -7%

Energy -19%.

One could easily argue, purely on mechanical grounds, that the 30% difference in performance between Consumer discretionary and Energy merits at least some rebalancing away from the first toward the second in an active portfolio.

I’m not ready to to this quite yet. I’d like to see yearend financials first. But the numbers argue that we’re getting close to the time to act.